Team 2025 Q1 Earnings Misses Targets as Net Loss Widens 72.8%

Team(TISI) reported its fiscal 2025 Q1 earnings on May 12th, 2025. Team's results did not meet expectations as both revenue and profitability declined, with a significant widening of net loss compared to the same quarter last year. The company has provided an optimistic guidance adjustment, projecting future top-line growth and improved EBITDA levels. Leadership remains focused on strategic execution to enhance financial performance amidst market uncertainties.

Revenue
In the first quarter of fiscal 2025, Team reported a total revenue of $198.66 million, reflecting a 0.5% decrease from the previous year. The Inspection and Heat Treating (IHT) segment achieved $106.22 million in revenue, showcasing a year-over-year increase, while the Mechanical Services (MS) segment generated $92.44 million. Corporate and shared support services contributed $0, maintaining the company's total revenue at $198.66 million.

Earnings/Net Income
Team's earnings for Q1 2025 showed a deepening loss of $6.61 per share, compared to a loss of $3.89 per share in Q1 2024, marking a 69.9% increase in loss. The net loss expanded by 72.8% to $-29.72 million from $-17.20 million in the prior year quarter. The EPS performance indicates a challenging financial period.

Price Action
The stock price of Team has edged up 2.52% during the latest trading day, has edged down 0.89% during the most recent full trading week, and has climbed 5.95% month-to-date.

Post-Earnings Price Action Review
Historically, a strategy of purchasing Team shares post-revenue drop on earnings release day and holding for 30 days has been profitable over the past five years. This approach generated an annualized return of 28.31%, outperforming the market by 13.02%. A $100 investment using this strategy could have grown to $348.60, demonstrating the power of compounded returns over time. The consistent returns reflect a strategic opportunity for investors who capitalize on price movements following earnings releases.

CEO Commentary
Keith D. Tucker, Chief Executive Officer of Team, Inc., remarked on the company's progress in strategic, financial, and operational initiatives during the first quarter. The Inspection and Heat Treating segment achieved a 6.8% revenue increase year-over-year, with a notable 39% rise in Adjusted EBITDA. However, the Mechanical Services segment faced challenges from reduced callout revenue and weather-related delays, resulting in flat overall revenue of $198.7 million. Tucker highlighted the successful refinancing that lowered capital costs and the launch of an optimization program expected to yield annualized savings of at least $10 million, while emphasizing a focus on top-line growth and margin enhancement.

Guidance
The company anticipates second quarter top-line growth compared to the prior year across both segments and expects improved Adjusted EBITDA levels. Team, Inc. aims for continued improvement in Canadian and international operations throughout the year, with a commitment to achieving at least 15% year-over-year growth in Adjusted EBITDA. The leadership team remains focused on executing their strategic vision to enhance financial performance and increase shareholder value, despite ongoing market uncertainties.

Additional News
In recent developments, Team, Inc. announced a significant refinancing transaction on March 13, 2025, aimed at optimizing its capital structure and reducing financial costs. Furthermore, on January 10, 2025, André C. Bouchard resigned as Executive Vice President, Administration, Chief Legal Officer, and Secretary. Additionally, a shareholder investigation concerning Team, Inc. (NYSE: TISI) was announced by Purcell & Lefkowitz LLP on January 2, 2025, following strategic changes within the company. These non-earnings related activities indicate ongoing efforts to strengthen financial flexibility and governance.